Financial payback on California residential solar electric systems

Cost effectiveness for consumers of solar electric systems has been achieved in the California residential market due to Time-of-Use Net Metering, a tiered electric rate structure with high rates, and subsidies by the state government. Three different approaches test and validate this hypothesis for a large fraction of consumers. Solar electricity can generate rates of return of 11-20% exceeding most other common investments, can increase property value by more than the cost to install the system, and generate a positive cash flow if financed. This paper suggests further study in the commercial sector and a survey to document evidence of increased home resale value. (C) 2004 Elsevier Ltd. All rights reserved.